German consumer price index remained stable compared with July

According to the report from the Federal Statistical Office (Destatis), the inflation rate in Germany, measured as the year-on-year change in the consumer price index (CPI), stood at +3.9% in August 2021. Thus, the inflation rate is approaching the four percent mark. The rate already stood at +3.8% in July 2021, after +2.3% in June 2021. A higher inflation rate was last measured in December 1993 (+4.3%).

There are a number of reasons for the increase in the inflation rate since July 2021, which include base effects due to low prices in 2020.

The prices of goods (total) increased by 5.6% between August 2020 and August 2021, which was above average. Especially the increase in Energy product prices (+12.6%) was markedly higher than overall inflation. The price increase for such products accelerated again (July 2021: +11.6%).

Food prices rose by 4.6% in August 2021 compared with the same month of the previous year. Compared with August 2020, higher prices were observed especially for vegetables (+9.0%) and dairy products and eggs (+5.0%). 

The year-on-year increases in energy product prices and food prices had a clear upward effect on the inflation rate. Excluding energy product prices, the inflation rate would have been +3.0% in August 2021; excluding the prices of both product groups, it would have been +2.8%. The prices of services (total) increased by 2.5% in August 2021 compared with the same month a year earlier. 

The consumer price index in August 2021 remained stable compared with July 2021. The prices of food (total), too, remained unchanged. However, there were some contrary price trends for individual products (for example, vegetables: -1.0%, edible fats and oils: +0.8%). Prices of energy products (total) only rose slightly by 0.4%. Here, motor fuel prices increased (+0.9%), whereas heating oil prices were down (-1.7%).